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DIRECTIVE No. 17/2004/CT-TTg OF MAY 24, 2004 ON STEPPING UP THE DISBUR-SEMENT OF OFFICIAL DEVELOPMENT ASSISTANCE (ODA) CAPITAL SOURCE

Thanks to the success of the renewal cause and the wide-open, diversifying and multilateralizing external policy of the Party and the State, our country has mobilized and attracted a considerable official development assistance (ODA) capital volume for the socio-economic development. Since 1993, the committed ODA capital has risen year after year, reaching a total of USD 25.34 billion now. The ODA capital source has been used for construction of socio-economic infrastructure; settlement of such social issues as hunger eradication and poverty alleviation; development of healthcare, education, science and technology, environmental protection, administrative and judicial reforms; and as supports for a number of production fields. Many ODA-funded projects have been put to use, thus contributing to the economic growth and improvement of people's life. The State management over ODA has been enhanced and step by step become a routine work. The system of ODA-managing agencies at all levels has been formed. The capacity of ODA management officials at the central and grassroots levels has been raised one step further.

However, the disbursement rate of ODA capital over the recent period has reached just 70-80% of the set plan, lower than the average disbursement rate of the regional ODA-receiving countries. The slow disbursement was attributed to numerous causes, but largely to subjective ones, such as lack of synchronous planning and policies for the ODA attraction and use; complicated and non-transparent order and procedures for evaluating and approving programs and projects; prolonged and inadequate compensation, resettlement and ground clearance; cumbersome, multi-door and multi-stage administrative procedures; failure of the leaderships of some ministries and localities to hectically direct and strictly urge and inspect the implementation; weak capacity of ODA management officials at all levels.

Prompted by the above-said practical situation, and with a view to stepping up the ODA disbursement in 2004 and subsequent years, striving to achieve the annual average ODA disbursement rate at least equal to the regional rate, and raising the efficiency of the ODA capital management and use in service of economic growth, the Prime Minister hereby instructs the ministries, central agencies and the People's Committees of the provinces and centrally-run cities to perform the following tasks:

1. The functional agencies must immediately review all legal documents on the State management over ODA and propose to the Prime Minister necessary measures to modify and supplement them in order to raise their legality and consistency with other legal documents on investment and construction management.

2. The ministries, agencies, provinces and centrally-run cities must immediately review their 2004 plans on investment capital distribution so as to ensure sufficient reciprocal capital for ODA-funded programs and projects.

3. The People's Committees of the provinces and centrally-run cities shall have to actively settle the land allocation and create all favorable conditions for the execution of ODA-funded programs and/or projects in their localities, adopt plans on construction of independent resettlement quarters to gain initiative in ground clearance and ensure the commencement and completion of programs and projects according to the schedules agreed between Vietnam and donors.

4. Program- and project-managing agencies must strengthen and raise the capacity of management officers as well as the management and administration capacity of ODA-funded project management boards, and ensure the sufficient supply of officers for such units; study the amendment, supplementation to and adjustment of the system of technical norms and standards to make it compatible with the practical situation and international practices.

5. The agencies in charge of State management over ODA should enhance the coordination with one another and with the People's Committees of the provinces and centrally-run cities in the course of ODA management and coordination, including the formulation of appropriate institutions to stimulate units which well execute ODA-funded projects and warn weak units. The capability of the implementing agencies and units to disburse capital for ODA-funded programs and projects should be considered a criterion for evaluation and approval of programs and projects of such agencies and units.

6. Under the Government's assignment, the functional agencies should organize the inspection and examination of ODA-funded projects in combination with the inspection and examination in the investment field, conduct the appraisal of ODA-funded investment projects after their construction process is completed; select a number of works for general appraisal to be jointly organized by themselves and the donors, and enhance cooperation with the donors in stepping up the ODA capital disbursement.

To organize the performance of the above-said tasks, the Prime Minister assigns the ministries and branches to carry out the following specific activities:

1. The Ministry of Planning and Investment shall assume the prime responsibility for, and coordinate with the Ministry of Finance and the concerned agencies in, reviewing all legal documents related to the State management over ODA. For the immediate future, right in the second quarter of 2004, it shall propose to the Prime Minister amendments and supplements to the Government's Decree No. 17/2001/ND-CP promulgating the Regulation on ODA management and use in the spirit of this Directive.

2. The Ministry of Finance and the Ministry of Natural Resources and Environment should closely coordinate with each other in adjusting and amending Decree No. 22/1998/ND-CP and drafting a decree on implementation of the Land Law, then submitting it to the Government for promulgation right after the amended Land Law takes effect.

3. The Ministry of Construction shall study and add contents related to the approval of technical designs and total cost estimates of ODA-funded investment projects to the decrees guiding the implementation of the Construction Law along the direction of stringency and avoidance of inconvenient and cumbersome procedures.

4. The Ministry of Planning and Investment shall review and ensure sufficient reciprocal capital for ODA-funded programs and projects in the 2004 plans and change the mode of assigning reciprocal capital plan targets for application in the 2005 plans, so that the ministries, agencies, provinces and centrally-run cities can flexibly allocate reciprocal capital for ODA-funded programs and projects according to the schedules agreed with the donors.

5. The Ministry of Finance shall promulgate in the third quarter of 2004 necessary documents to simplify the processes and procedures for control of expenditures, payment for completed volumes, the procedures for ODA capital and reciprocal capital disbursement, and revise for further improving the spending norms of project management boards.

6. The Ministry of Planning and Investment shall coordinate with the ministries, branches, localities and donors in implementing in the third quarter of 2004 the Program on training and strengthening the capacity of ODA-funded project management boards.

7. To assign the Ministry of Planning and Investment to act as head of the inter-branch team, which is composed of departmental officials representing the Ministry of Finance, the Ministry of Construction, the Ministry of Natural Resources and Environment, Vietnam State Bank and the Government Office, to detect and promptly solve, through periodical briefings as from the second quarter of 2004, problems arising in the course of execution of ODA-funded programs and projects, sum up and report the results of briefings to the Prime Minister, and notify them to the concerned ministries, agencies, provinces and cities, so that the latter can apply improving measures at their respective units or localities.

8. In June 2004, the Ministry of Planning and Investment shall coordinate with the agencies in charge of State management over ODA and the donors in working out action plans on harmonization of ODA processes and procedures, focusing on the processes of evaluation and approval of programs and projects, bidding, disbursement plans, monitoring and appraisal of programs and projects, the regime of reporting on execution of ODA-funded programs and projects.

The Ministry of Planning and Investment shall have to urge, monitor and periodically report on the implementation of this Directive to the Prime Minister.

Prime Minister
PHAN VAN KHAI